Pakistan Scours Global Market for Winter LNG as Qatar Extends Supply Suspension

ISLAMABAD — Pakistan is actively seeking alternative liquefied natural gas (LNG) supplies to meet rising winter demand after QatarEnergy extended its delivery suspension until November 5, according to a senior government official.

Pakistan imports LNG to supplement domestic production, supporting households, factories, power stations, and fertilizer plants. According to the country’s latest economic survey, imported LNG accounted for approximately one-fifth of total gas consumption during the fiscal period from July 2025 to March 2026.

The ongoing conflict between the United States and Iran has disrupted maritime shipping through the Strait of Hormuz, a critical chokepoint through which nearly 20 percent of the world’s LNG trade flowed in 2025. In March, following attacks on its facilities, QatarEnergy halted production and declared force majeure—a contractual provision that allows a supplier to suspend delivery obligations due to extraordinary events beyond its control.

A Pakistani official involved in LNG procurement, who spoke on condition of anonymity due to lack of public authorization, stated that Islamabad is exploring cargoes from both Qatar and alternative suppliers. While officials had hoped to secure two Qatari shipments in October, they have yet to receive any formal assurance.

“We are hopeful of securing additional LNG cargoes from Qatar, similar to the two shipments we successfully received in September through Pakistan’s diplomatic efforts,” the official told Arab News on Tuesday evening.

Under long-term agreements, Pakistan typically receives around nine cargoes per month from Qatar. State-owned Pakistan State Oil, which manages two of these contracts, reported importing a total of 109 LNG cargoes in the fiscal year ending June 2025.

In contrast, Pakistan received only nine Qatari cargoes after March of this year. To offset the shortfall, the country purchased seven replacement shipments on the international spot market by July. Spot purchases refer to individual cargoes acquired at prevailing market prices rather than under long-term supply contracts.

According to the official, the two shipments received in September arrived at pre-conflict rates. However, any future spot purchases will depend on market affordability and domestic demand.

“The decision to procure new spot LNG cargoes will be made at the highest government level, based on price and the country’s specific requirements,” he added.

The official estimated that Pakistan’s LNG requirements would escalate as colder weather sets in, projecting a need for three or four cargoes in November, seven or eight in December, and ten to eleven in January.

Petroleum Ministry spokesman Zafar Abbas declined to comment on procurement details, stating that the matter remains under active government consideration. Separately, an official from Pakistan State Oil noted that the company cannot make decisions regarding future purchases without direct ministry guidance.

An official at one of Pakistan’s major gas utilities acknowledged that there is no immediate gas crisis but expressed concern regarding potential further extensions of Qatar’s delivery suspension.

Another energy-sector official noted that winter demand from power stations is expected to decrease, shifting the burden onto households and industrial sectors. He warned that supply shortages could drive more consumers to rely on liquefied petroleum gas (LPG) cylinders for cooking and heating, potentially driving up its market price.

WINTER SUPPLY RISKS

The Pakistan Business Forum, a prominent business advocacy group, has urged the government to develop a comprehensive contingency plan addressing supplies for households, industry, electricity generation, and fertilizer production.

“The immediate priority must be to protect the productive sectors of the economy,” stated Ahmad Jawad, the chief organizer of the forum, in a statement to Arab News.

“While domestic consumers must be protected, it is equally critical to prevent industry, fertilizer plants, and power generation from facing unplanned gas shortages. Such shortages would ultimately impose much larger economic costs, manifesting as higher electricity prices, reduced industrial output, lower agricultural yields, and increased pressure on foreign imports,” he elaborated.

The government has not yet specified which consumer segments would receive priority in the event of supply shortages.

Jawad urged Islamabad to diversify its supplier base, secure commercially viable spot cargoes, and negotiate flexible payment arrangements. Pakistan’s search for alternative supplies coincides with European buyers replenishing their winter gas stocks, intensifying competition with Asian customers for limited available shipments and driving up import costs.

Gas serves a dual purpose as both a fuel and a raw material for fertilizer production, meaning that supply disruptions pose significant risks to both farmers and manufacturers.

“Fertilizer production is directly linked to national food security. Any prolonged disruption in gas supplies to fertilizer plants could reduce domestic urea availability, ultimately increasing the country’s import bill,” Jawad warned.

Source link